Sample Comprehensive Financial Plan - B.E.S.T. Wealth ...

1 Especially Prepared For:John and Jane DoeBy: Brad TinnonCERTIFIED Financial PLANNER September 2013 Sample Comprehensive Financial Wealth Management, LLCS eptember 30, 2013 John and Jane DoePresented by: Brad Tinnon, CFP Wealth Management, LLC NET WORTH SUMMARY January 2011 $302,518 September 2012 $375,821 September 2013 $447,001 Personal Assets - JohnPersonal Assets - JaneABC Company 401(k)$120,0004 Parkway School District 403(b)$25,0002 Wealth Roth IRA$16,0005$120,000 Public School Retirement Pension$11 -------------$41,001529 College savings - JohnOther AssetsMissouri MOST 529 (fbo Johnny)

2 $15,000 ------------- -------------$15,000$0 Life Insurance Net - JohnLife Insurance Net - JaneABC Company Group Policy$300,000 Spousal Group Policy$50,000 ----------------Rockwood Group Policy$50,000$300,000 ----------------$100,000 Joint PropertyDebts & LiabilitiesFirst Bank Checking$6,000 Mortgage$225,0003 First Bank savings $30,000 ------------- Wealth Non IRA Acct$105,000$225,000 Personal Residence$300,000 Furnishings$30,000 Vehicles$25,000 ------------- $496,000 Current ValuesGross Estate Values$120,000 <==AssetsJohnAssets + Life Insurance==>$668,000$41,001 <==AssetsJaneAssets + Life Insurance==>$389,001$496,000 <==AssetsJoint Property$15,000 <==Assets529 Plans($15,000)$0 <==AssetsOther Assets$672,001 Total Assets($225,000)Known Debts and Liabilities($225,000)$447,001 Total Net WorthTotal Estate Value Minus Debt/Liabilities $817, Wealth Management, LLC4 Contributing 10% of salary.

3 Company matches 4% of Contributing $458 / WORTH STATEMENTJohn and Jane DoeSeptember 30, 20131 100% vested. 2 Contributing 5% of salary. No company Principal and Interest pmt = $1,074 / month. Interest rate = 30 Year Loan. Payoff Date = October Wealth Management, Wealth Management, LLC Brad Tinnon OBJECTIVES According to the information gathered in our previous meetings, your objectives are: 1. Maintain an adequate emergency fund. 2. Review the overall asset allocation of your investments. 3. Have the Financial option to retire at John s age 65 and cover retirement expenses (required + desired expenses) of $6,000 per month ($7,500 / mo with taxes factored in) until Jane s age 90.

4 4. Fund college education for your child. 5. Assure that in the event of an untimely death, the surviving spouse is able to maintain his/her desired lifestyle. 6. Analyze current estate and determine appropriate action to take. Wealth Management, LLCS eptember 30, 2013 John and Jane DoePresented by: Brad Tinnon, CFP Wealth Management, LLC Brad Tinnon RECOMMENDATIONS The following recommendations are not listed in order of priority or importance. Some recommendations should be implemented immediately while others are given as long-term concepts to consider.

5 1. OBJECTIVE: Maintain an adequate emergency fund. An appropriate emergency fund usually covers three to six months of expenses, but could be more depending on the security of your jobs. When two spouses are employed and job security is relatively high, a three month emergency reserve can suffice. Since both spouses work, an emergency fund consisting of 3 months of expenses would be appropriate. Your monthly basic living expenses are estimated to be $6,000; therefore, a 3 month emergency fund of $18,000 would be appropriate. These funds should be held in an FDIC guaranteed type account such as a money market account or a savings account.

6 You currently have approximately $30,000 that qualifies as emergency funds so this goal is overfunded by $12,000. It is recommended that you utilize this excess to either fund your child s education goal or your retirement. 2. OBJECTIVE: Review the overall asset allocation of your investments. In reviewing the overall asset allocation of your retirement investments, your time horizon and risk tolerance suggests that the Moderate Growth portfolio (54% stocks / 20% bonds / 26% alternatives) may be most appropriate.

7 Since we review whether your accounts need to be rebalanced on a daily basis, your allocation is already in order. Wealth Management, LLC Brad Tinnon 3. OBJECTIVE: Have the Financial option to retire at John s age 65 and cover retirement expenses (required + desired expenses) of $6,000 per month ($7,500 / mo with taxes factored in) until Jane s age 90. At retirement, your investments need to be valued at approximately $4,928,126 in order to cover your retirement expenses. Based on the assumptions utilized, your investments are projected to grow to $4,876,049 at retirement.

8 This leaves a shortfall of $52,077. As a result of the shortfall, it is recommended that John set up a Roth IRA and attempt to fund it with the maximum amount allowed (currently $458 / mo). 4. OBJECTIVE: Fund college education for your child. In order to fully fund the college education of Johnny you will need to set aside approximately $239 per month. If you desire to start setting money aside for this goal, I suggest doing so in your existing 529 College savings Account. We will further discuss this goal when we meet and whether or not this goal should take priority over other goals you ve established.

9 Wealth Management, LLC Brad Tinnon 5. OBJECTIVE: Assure that in the event of an untimely death, the surviving spouse is able to maintain his or her desired lifestyle. The survivor analysis suggests that Jane would have a Capital Shortfall of $1,244,989 in the event of John s untimely death. In other words, to provide Jane with her standard of living until her age 90, additional insurance coverage of $1,244,989 is needed on John s life. The survivor analysis suggests that John would have a Capital Shortfall of $297,186 in the event of Jane s untimely death.

10 In other words, to provide John with his standard of living until his age 90, additional insurance coverage of $297,186 is needed on Jane s life. Ideally, I like to see insurance in place up until the point you reach retirement. At that point, a death will not cause a Financial hardship, so long as the retirement goal has been met. In essence, the goal is to self insure when you enter retirement. Therefore, I am recommending that each of you obtain a 30 year term policy. Additionally, I recommend that you add a child rider to the policy to cover you financially in the event that Johnny would unexpectedly pass away.